After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Retail director, Quintain
Beyond returning to some semblance of normality as quickly as possible, I hope we create a new, better normal – and one that sees investment in our high streets. One way we will do this, and which I expect to see more of, is landlords further supporting independents. That means providing the resources – financial and expertise – to co-create brilliant retail, F&B and leisure spaces, and working collaboratively to support start-ups with the big commercial decisions they may not have much experience with. This approach is the first step in creating authentic, attractive retail destinations that respond to the locality.
I also hope to see the industry continue to lobby for business rates reform, creating a fairer system for everyone – from the family-run independents at Wembley Park to global names such as those at London Designer Outlet – and one in which rates are reinvested to ensure consistently high-quality high streets across the country.
Director of housing and regeneration, West Midlands Combined Authority
Covid has reminded us all of the important truth that a spirit of togetherness and collective problem-solving is critical to finding our way through huge challenges. We have taken considerable inspiration from that spirit in driving forward the work we are doing in tackling some of the most complex brownfield regeneration sites in the country, to deliver homes, jobs and regeneration for communities.
These are sites that have lain fallow for decades and stubbornly resisted all attempts at development. Our approach to realising their potential is to work closely with our local authority and private sector partners and government – coming together, building trust, sharing knowledge, expertise and funding in a spirit of shared endeavour.
This year, we will build on that work and bring the same spirit to drive forward our commitment to ever more sophisticated approaches to modular construction and becoming a national leader in zero carbon – two areas where we want to use our influence as a public sector leader to accelerate industry transformation. By working together, we can overcome the even bigger challenge we all face: the climate emergency.
Director, Lateral Investment Management
We believe investment transaction volumes and the development of life sciences real estate will continue to rise, even rivalling the industrial sector, which, despite many calling the top of the market several times over the past year, is still going strong.
We believe there will be many new entrants to the life sciences sector, from the UK and overseas, as funds look to divest retail assets in favour of a more balanced weighting. On the construction and design side, we think there will be a more conscious shift in how we measure embodied carbon and a crackdown on materials waste. Despite the groundswell in favour of combating climate change, 17% of construction materials were still going straight to landfill just 18 months ago.
We also believe 2022 will finally bring a real value associated with sustainability, as investors shun properties without the right green credentials and legislation-linked buy and sell choices are made; for example, no core fund will buy a property that has an EPC of E as it cannot be rented, sold or otherwise in five years’ time without serious investment.
Senior director, asset management, CBRE
One subject still top of the agenda for 2022 will be sustainability, and I feel very strongly about this. In 2021, sustainability was very high profile especially due to COP26 – rightfully so – and this has been a wake-up call for all in the property industry too. There will be even greater scrutiny on what property owners and developers do when it comes to reducing carbon emissions.
Solutions such as green walls, planting in social areas of estates and creating more energy-efficient or net zero carbon buildings will all come to be expected. My hope for 2022 is for sustainability to become an integral part of any company. No matter the sector, every firm will need to have its own dedicated strategy, including clear goals and the appropriate training and support to deliver this commitment.
Another hope is that landlords and tenants work co-operatively to ensure the economic recovery continues; collaboration is the key to survival. I think this trend has hugely benefited the retail and hospitality industries as well as the property sector, with an emphasis on investment in new business initiatives and allowing new brands to enter the market.
Principal of Addington Capital
“My hope is that Boris starts listening to his backbenchers and regains his touch with the public mood, particularly with Red Wall constituencies of the Midlands and the North as there is still much to achieve. I hope the resilience of the UK economy continues so that we can get further interest rate rises before the end of 2022, indicating a healthy economy.
I expect UK real estate to continue to be a target for both UK and overseas investors with increasing prices across most sectors. Residential still has a lot of catching up to do on the supply side. Office returns will polarise with the best located and specified buildings continuing to improve in value, as occupiers need to attract talent. The recovery play for 2022 will be retail – I expect rental levels to bottom for better quality Shopping Centres and the return of private equity and fund investors to the sector.”
Predictions for 2022: Brace yourself…
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Predictions for 2022: Brace yourself (part fifty-three)